Sports giant Fanatics has announced its agreement to acquire the U.S. operations of PointsBet, marking its first significant move into the U.S. sports betting market. The deal, valued at approximately $150 million in cash, was announced following reports of an agreement reached between the two companies.
Fanatics and PointsBet issued a joint statement expressing their excitement about the acquisition, although they noted that there are still several steps to be completed before the deal is finalized. Both parties are confident in the outcome and will provide further details and updates in the coming weeks.
With this acquisition, Fanatics will gain access to at least 15 states, according to anonymous sources familiar with the deal. The company expects to have access to the majority of states where PointsBet operates by the start of the NFL season.
PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in late June. Only PointsBet’s U.S. assets are included in the agreement. Fanatics plans to provide funding for some of PointsBet’s remaining cash flow burn, as the company has invested heavily in marketing to compete with larger rivals such as DraftKings and FanDuel.
PointsBet has projected a loss of between $77 million and $82 million for the second half of the year, citing “very challenging” market conditions. The company stated that if the deal with Fanatics were to fall apart, it would need to raise additional capital at a significant discount to recent market prices in the near term.
As part of the deal, NBCUniversal will no longer hold an equity stake in PointsBet but will receive proceeds from its previous agreement with the company. NBC had acquired a 4.9% equity stake in PointsBet in 2020 but will retain a stake in PointsBet’s Australian parent company.
Fanatics, with a private valuation of $31 billion, has been engaging in discussions with various sports betting companies over the past year as it expands into the mobile gambling industry. The company owns commerce assets, a sports trading card business, and is developing its sports betting division. Last year, Fanatics acquired the renowned trading card company Topps for $500 million.
With its broad platform and diverse business segments, Fanatics aims to strategically navigate its entry into the sports betting market over the next decade. The company’s projected revenue for 2023 is $8 billion.
